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Telecom Italia makes surprise shift to web content

Teams up with News Corp, Sky Italia

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Telecom Italia plans to distribute music, movies, and television over its broadband internet service in a radical departure from its core business.

Negotiations have been taking place between Telecom Italia chairman Marco Tronchetti Provera and his News Corp counterpart Rupert Murdoch on a content deal with Sky Italia.

An announcement on the company's decision to sell Telecom Italia Mobile (TIM) - Italy's number one mobile phone provider - in order to free up cash is expected to be made later today.

It's a move that signals a significant shift from a company providing traditional telecommunications over to media content services made available online.

Telecom Italia merged with TIM less than two years ago in a €20bn deal, but has felt the pinch and recorded losses in what has been a turbulent marketplace ever since.

Last week, Sky snapped up satellite rights to show Italy's series B football matches for this season. One of the viewing highlights is expected to be relegated match-fixers Juventus.

Consultants advising Telecom Italia have said the decision to move into delivering media content for broadband customers is well-timed. ®

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